New Zealand Lifestyle Block Mythology

New Zealand Lifestyle Block Mythology – The Need
For Rigorous Research

Since the early 1980’s
- as forced urban consolidation began to “bite” and the
process of artificial urban property inflation got underway
– as part of the “flight to affordability” (preference
always trumps policy) a reverse process of rural migration
gathered momentum, as people sought “more affordable”
housing options. For the first decade or so, urban planners
attempted to stem this tide, by requiring these “urban
refugees” prove that their new lifestyle blocks were
“economic units”, which precipitated much unproductive
and time wasting work for farm consultants, as they
generated fictitious intensive farming / horticulture
schemes with fanciful financial projections. More often than
not these were “approved” – but eventually this
“economic unit test” regime was abandoned. It was a
farce of course – although it took some considerable time
for the urban planners to wake up to it.

There has
been some research done on this issue, such as that by the
Rodney Council , following an earlier one during 2004 by
LincolnUniversity– that could at best be described as
“shallow and sketchy”. The Lincolnresearch indicated
that around 376 square kilometres (37,600 hectares) are
converted from farming use annually throughout New Zealandto
around 6,800 new lifestyle blocks for 18,000 people.
Expanding on these figures - it seems likely that as much as
10,000 square kilometres of land area (3.72% of total land
area) has moved from farming use to lifestyle blocks over
the past couple of decades.

The attached article
suggests that lifestyle blocks turn over every three to five
years. The turnover rate for conventional suburban housing
is significantly less – probably around once every 16
years on average. With 80% (3,360,000 people) of our
population of 4,200,000 living in urban areas and at an
average of 2.7 people ( Statistics NZ 2006 Census Housing
Quickfacts ) per household - this would indicate that our
“usually occupied” urban housing stock is in the order
of 1,244,444 units.

The Real Estate Institute of New
Zealand (REINZ) Market Trends Graph indicates that in
October 2006 8867 residential units transacted nationally
– with a decline to 6854 during the month of October 2007.
This would suggest that the current total residential
unit’s transaction volumes via Real Estate Institute
members are running at about 90,000 annually (REINZ members
are reputed to handle in excess of 90% of all transactions)
– so this would indicate that the annual national
residential unit transaction volume is running at about
100,000 – and slipping.

There are approximately
25,000 new residential builds annually (again currently
slipping) according to the latest Building Consents Issued:
September 2007 Report from Statistics NZ. We have hit the
“affordability ceiling”.

Within the same edition
of The Press (Christchurch NZ) there was an interesting
article on the growth and consolidation of the booming Dairy
farming industry, with an excellent Table illustrating land
use in New Zealand.

New Zealand has a land area of
268,680 square kilometres – and the Table from this
article suggests (converting 100 hectares to 1 square
kilometre) that New Zealand now has 21,115 square kilometres
in dairy use (7.85% of our total land area), some 80,916
square kilometres in sheep farming use (30.11%), 15,055
square kilometres in beef farming use (5.60%), some 2230 in
deer farming use (0.82%), 1990 (0.70%) in mixed livestock
use and 656 (0.24%) square kilometres used for grain
growing. The Press did not indicate where it got these
figures from.

The Demographia Global Urban Density
Tables states that Christchurch, New Zealand has an “urban
density” (Christchurch is mid range – Auckland and
Wellington higher) of 1900 people per square kilometre –
and with our urban population being some 80% of the total
population – this would suggest that (3,360,000 divided by
1900) some 1768 square kilometres of our land area – or
about 0.66% of our total land area is urbanized.

The
above figures indicate that there is more land available to
farm “deer” ( 2230 sq km - 0.82% of the total land area)
than the current land area of our cities / urban markets
(1768 sq km - 0.66% of the total land area). The deer
industry in New Zealandcould not be described as a
“stellar performer”. Provisional estimates of its total
exports for 2007 are expected to be a paltry $NZ317 million
(around $US244 million) and the industry has been struggling
with poor profitability for many years as production has
shrunk . Beef (5.60%) and sheep (30.11% of our land area)
have generally been poor performers as well. Yet sadly –
urban planners appear “hell bent” on strangling the land
supply to our cities – the “engine drivers” of a
modern economy.

New Zealand’s (using 2006 IMF
figures) had a GDP of $US108 billion ranking 53rd in size
(or approximately – representing 0.20% (one fifth of one
percent) of the world economy. The urban markets of Houston
and Dallas Fort Worth have GDPs in the order of $US315
billion – and (according to the US Bureau of Economic
Analysis ) New Zealand’s GDP is comparable to the State
of Iowa($US106 billion) or the city of Pittsburgh($US102
billion).

At the Christchurchurban density of 1900
people per square kilometre – we would require one fifth
of one percent (0.20%) of our total land area to urbanize a
further one million people. We could not urbanize a further
half a percent of our total land area over the next fifty
years – if we tried.

Yet – we are “burning
up” an additional (according to the Lincoln Study) 376
square kilometres of farmland annually for “lifestyle
use” because we are not prepared to “allow” around 20
to 25 square kilometres annually for natural urban
expansion. This would (again) “allow” young and lower
waged people the opportunity to purchase new fringe urban
housing of 200 square meters on 500 square meter blocks for
between $NZ140,000 to $NZ180,000.

These issues were
covered within the Demographia submission to the New Zealand
Parliaments Commerce Committee Housing Affordability
Inquiry.

The Press article attached “The end of
the good life” outlines how these lifestyle blocks
transact every three to five years, as their new owners
quickly become acutely aware of their isolation,
inconvenience and costs. Not surprisingly – the further
out the lifestyle blocks, the cheaper they become, to
partially compensate for the additional and unnecessary
travel costs involved.

At this stage – the
“comprehensive disruption costs” – in environmental,
social and economic terms - of misguided policies of
“forced urban consolidation” are poorly understood.
Rigorous research on these unnecessary “costs” is long
overdue.

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